DUBLIN–(BUSINESS WIRE)–The “South Korea Construction Industry Databook Series – Market Size & Forecast by Value and Volume (area and units) across 40+ Market Segments in Residential, Commercial, Industrial, Institutional, Infrastructure Construction and City Level Construction by Value , Q4 2022 Update” report has been added to ResearchAndMarkets.com’s offering.
The construction industry in South Korea is expected to grow by 4.0% to reach KRW 138,842 billion in 2022.
Despite near-term challenges in certain construction sectors, medium to long term growth story in South Korea remains intact. The construction industry in South Korea is expected to grow steadily over the next four quarters. The growth momentum is expected to continue over the forecast period, recording a CAGR of 1.9% during 2022-2026. The construction output in the country is expected to reach KRW 159,075.5 billion by 2026.
The South Korean construction industry is one of the major contributors to the nation’s GDP. Over the last decade, the cost of construction work has increased steadily in South Korea, alongside the growing demand for overseas or residential construction projects. This trend is expected to continue further over the next three to four years as the government seeks to develop and construct infrastructure in South Korea.
However, just like the global trends, rising inflation, building material costs, and labor shortages are plaguing the construction industry in South Korea. The sector has called on the government to lift restrictions on hiring foreign workers to combat the growing issue of labor shortage. Although these factors are expected to have a short-term impact on the growth of the industry, the medium to long-term perspective remains strong for the South Korean construction sector.
The South Korean government plans to help construction firms win US$50 billion of overseas work per year
With the aim of promoting the construction and engineering industry in South Korea, the government is planning to help construction companies win over projects in the global market.
In July 2022, the Ministry of Land, Infrastructure, and Transport announced that it is planning to help construction firms win contracts worth US$50 billion in overseas projects each year. Notably, the construction and engineering industry in South Korea has suffered a long stagnation, with advanced overseas orders declining from a peak of US$72 billion in 2010 to US$31 billion in 2021. According to The Korea Herald, the Ministry aims to provide a construction package that will include building airports, railways, and smart cities.
This assistance from the South Korean government will keep supporting the growth of the construction industry in the country over the next three to four years.
The construction industry in South Korea faces a stiff labor shortage challenge, much like the global trend
With the problem of labor shortage becoming more and more serious in South Korea, the construction industry is calling on the government to interfere by easing or lifting restrictions on the hiring of foreign workers. In addition to this, the construction sector has also asked the government to issue pardons to the firms which were imposed restrictions on hiring.
According to the Construction Workers Mutual Aid Association, the industry will have a total labor demand of 1.75 million in 2022. However, the availability of domestic labor supply for the construction sector is limited to 1.54 million because of the rapid population aging and the tendency of young workers to avoid high-risk and intense jobs.
Currently, the number of legitimate foreign construction workers at sites in South Korea with visas granted remains low at approximately 65,000. The publisher expects the labor shortage issue to remain persistent in the short term, which might therefore lead to construction delays affecting the industry growth.
Young South Koreans are increasing buying homes despite surging interest rates in the country
With the growing inflation around the world, Central Banks globally are rising interest rates, and the trend is no different. However, despite the rising interest rates, young South Koreans are buying homes in the country. This again put a spotlight on the severe housing shortage in South Korea.
The growing demand for housing units, driven by the fear of missing out on a property due to soaring prices, is supporting the growth of the residential construction sector. However, there is also the risk of a sharp housing correction and consumption downturn, as mortgage rates have surged to nine years high, thereby adding more strains on households.
Scope
Market Data and Insights:
This report provides market size and forecast across 40+ construction segments for a period of 10 years from 2016-2025 in South Korea.
KPIs covered include the following:
South Korea Top Cities Construction Data
South Korea Residential Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
South Korea Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
South Korea Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
South Korea Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
South Korea Industrial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units)
South Korea Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
South Korea Institutional Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
South Korea Infrastructure Construction Sectors: 10- year market size & forecast in value terms by
South Korea Green Infrastructure Construction: 10- year market size & forecast in value terms
For more information about this report visit https://www.researchandmarkets.com/r/55slkg
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